Is there a link between cashless payments and unhealthy consumption?

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Cashless payments such as credit cards, debit cards and mobile apps have become widely used, making transactions more convenient for consumers. However, the results of previous studies have shown that such cashless payments can increase consumer spending on unhealthy foods. “Why cashless payments increase unhealthy consumption? The careless hypothesis of decision risk”, Journal of Consumer Research AssociationExplains this phenomenon by showing how changes in physical response to cashless payments affect consumer response.

Authors Joowon Park, Clarence Lee, and Manoj Thomas suggest that cash and cashless payments cause varying levels of negative arousal when making shopping decisions. “Most people experience a spontaneous negative emotional response to a loss of wealth, especially if such loss is concrete and vivid,” the author states. In contrast, when a person swipes a card or uses mobile payments, it is difficult to visualize the money changer. Payment will be made at a later date, but this probably does not require the physical delivery of money. “Since such transactions are not specific, cashless payments are unlikely to provoke a negative awakening that is rated as’payment pain’,” the author writes.

Since arousal has been shown to direct people’s attention to environmentally dangerous factors, the author can keep consumer attention away from decision-making risk at low levels of arousal caused by cashless payments. Suggests. This keeps shoppers from paying attention to, for example, food-related risks (for example, the risks that a product can have a long-term adverse health effect). The author calls this process “carelessness of decision risk” caused by cashless payments.

To test this idea, the author invited participants to a simulated grocery shopping lab. There, some participants were told to imagine cash payments, while others were told to imagine cashless payments. During the shopping simulation, participants wore devices to measure changes in body alertness levels. The authors found that participants considering cashless payments were less aroused than participants considering cash payments. Increased awakening from cash payments will increase participants’ attention to food-related health risks and, as a result, reduce the likelihood of adding unhealthy items such as cookies and candies to their shopping cart. I did. On the other hand, due to the low alertness of cashless payments, participants are less likely to pay attention to health risks and are more likely to purchase unhealthy products. In short, cashless payments have reduced participants’ attention to decision-making risks. Changes in arousal did not affect the decision to buy health foods such as apples and salads. These purchases do not carry such decision risk.

In a similar survey, participants were asked to imagine the opening of dessert bars in major cities in the United States. They were told that the company was interested in understanding the popularity of some desserts. Participants looked at some dessert photos and descriptions to show how much they were willing to pay for each. As with previous results, participants who were thinking of paying cashless were willing to pay more for desserts than participants who were thinking of paying in cash. In addition, this gap was more pronounced for higher level educated participants, who were probably better aware of the health risks of consuming desserts. The authors found that more educated participants would be more willing to pay for desserts if they did not pay attention to the risks posed by cashless payments. However, for less educated participants, different payment methods did not affect the amount they were willing to pay. The authors found that the level of attention to health risk was not important to these participants. Probably because they were not fully aware of such health risks.

One of the points gained from the study is the possibility of testing hypotheses in other situations with different types of decision risk. “Compared to physical shoppers, Amazon’s cashless shoppers are less risk-sensitive and are fundamentally willing to try new products? The casino is a mobile app rather than a physical chip. Will gamblers be willing to do so if they start offering chips? Will they bet their money on more dangerous gambling? ”

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For more information:
Joowon Park et al, why cashless payments increase unhealthy consumption? Inattention hypothesis of decision risk, Journal of Consumer Research Association (2020). DOI: 10.1086 / 710251

Courtesy of the University of Chicago

Quote: Is there a link between cashless payments and unhealthy consumption? (January 27, 2021) Obtained January 27, 2021 from

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Is there a link between cashless payments and unhealthy consumption?

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